The G-7 is in full panic mode. The organization for the prevention of harm to the Status Quo was expected to release a communique possibly over the weekend, but the speed with which one was dropped for mass circulation is stunning and confirms that its members are in full meltdown as the weekend comes. It is now certain that the G-7 will attempt some major intervention over the next 48 hours to inject a last dose of hope into capital markets, or else the Monday open will be an epic collapse.

G-7 Statement on Tackling Slowdown, Supporting Banks

“We met at a time of new challenges to global economic recovery, with significant challenges to growth, fiscal deficits and sovereign debt, stemming from past accumulated imbalances.

This is reflected in heightened tensions in financial markets.

There are now clear signs of a slowdown in global growth. We are committed to a strong and coordinated international response to these challenges.

“We are taking strong actions to maintain financial stability, restore confidence and support growth. In the U.S., President Obama has put forward a significant package to strengthen growth and employment through public investments, tax incentives and targeted job measures, combined with fiscal reforms designed to restore fiscal sustainability over the medium term. Euro area countries are implementing the decisions taken on July 21 to address financial tensions, notably through the flexibilization of the EFSF, reaffirming their inflexible determination to honor fully their own individual sovereign signatures and their commitments to sustainable fiscal conditions and structure reforms. Japan is implementing substantial fiscal measures for reconstruction from the earthquake while ensuring the commitment to medium-term fiscal consolidation.

“Concerns over the pace and future of the recovery underscore the need for a concerted effort at a global level in support of strong, sustainable and balanced growth. We must all set out and implement ambitious and growth-friendly fiscal consolidation plans rooted within credible fiscal frameworks.

Fiscal policy faces a delicate balancing act. Given the still fragile nature of the recovery, we must tread the difficult path of achieving fiscal adjustment plans while supporting economic activity, taking into account different national circumstances.

“Monetary policies will maintain price stability and continue to support economic recovery. Central Banks stand ready to provide liquidity to banks as required. We will take all necessary actions to ensure the resilience of banking systems and financial markets. In this context we reaffirm our commitment to implement fully Basel III.

“We reaffirmed our shared interest in a strong and stable international financial system, and our support for market- determined exchange rates. Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability. We will consult closely in regard to actions in exchange markets and will cooperate as appropriate.

“We look forward to working with our colleagues in the G20 and the IMF in the coming weeks to rebalance demand and strengthen global growth. As previously agreed, structural reforms will make an important contribution in this regard.”

"The G7 reaffirmed its comittment to safeguarding the solidity of sovereign ratings."

"We have to get away from the idea there is only one solution for all... It's not rigour versus growth."

"It was a G7 where everything was raised. There was no dead time."

BANK OF FRANCE GOVERNOR CHRISTIAN NOYER

"There is an extreme tension on the markets, what's important is that very strong measures are taken by governments concerned."

"It was really a meeting of great cohesion and force. There was a determination by everyone to meet challenges."

G7 OFFICIAL

"The G7 sees a need for a concerted effort at global level in support of strong, sustainable and balanced growth.

"We must all set out and implement ambitious and growth-friendly fiscal consolidation plans rooted within credible frameworks.

"The G7 affirmed its interest in a strong, stable international financial system."

EARLIER COMMENTS

U.S. TREASURY SECRETARY TIMOTHY GEITHNER

"It is completely within the capacity of the stronger members of the euro area to absorb those costs. Those costs would be much, much greater for them and their economies if they sit here and do nothing and they recognize that."

CANADIAN FINANCE MINISTER JIM FLAHERTY

"I hope we would all agree we have to stay the course, that we have to go through the pain of fiscal consolidation. It's not easy, it creates stresses in some countries, but it's necessary, we have to get through this rough patch.

"There's no point kicking the can down the road. If we don't deal with it now we'll have to deal with it later and we know that these problems do not get better with the passage of time."

EU ECONOMIC AND MONETARY AFFAIRS COMMISSIONER OLLI REHN

"We support the United States in its work so that the U.S. recovery can continue, while in Europe we have our own challenges related to fiscal consolidation and restoring confidence in the European economy."

On bank funding:

"Solutions should be found from private markets, from private investors and if that is not is possible there should be national backstops in place to ensure recapitalisations or restructuring for these banks."

Given that huge percentage, I don't understand why all you guys are not cheering for more money printing, more bailouts, more rescues, more monetizations, bigger deficits, and more G-7 collusion to prop up stocks.

That is why you guys should be cheering and high-fiving for Dow 15,000, not 5,000.

Actually, the higher the CDS spreads blow out, that means an even higher probability that the ultimate rescue/bailout package is going to be a stunner.

So I should correct myself and say you guys should be calling for a "cliff edge collapse", then a monstrous equity rally afterwards.

Reality won't change just because you don't like something. Stocks will explode along with PMs, but the problem is that the real value is going to continue to drop while the nominal value increases. PMs are the better trade, because gold or silver will not be needing to add layers of bureaucrats and accountants to deal with the issues raised by severe inflation- they just sit there and hold value.

It's not a good trade, in real terms- but it can be a good trade in nominal terms. There's room in there to make fortunes, but it's stupidly dangerous, and would require the luck and timing of the devil himself.

Well, regardless of what we cheer for, a lot of people here are expecting a major decline, followed by money printing, followed by another leg up in gold, and probably the indexes as well. At least thats the sense I get from reading a lot of the posts. Although I think there is a lot of skepticism about whether the indexes will rally like they did with qe 2.

robo - i have no idea why folks get down on you on this blog. I'm a trader at heart (I've been burned for the last time by buy and hold strategies) and have done OK in both up and down markets. If you want to pass a few of your trading insights my way I'd be glad to receive them.

I have not made a ton of money on the way up but I sure haven't lost much on the way down (and even profited at times in falling markets) and I am somewhat comfortable with my financial net worth.

I try to take what the market gives but I must admit that's getting harder all the time - at least for me. Volitility is good - as long as you are positioned on the right side of it (or out of the market). For the gold and silver bulls its true that I keep a core position in the metals but trade around them and also trade the miners. Works out OK for me. But I also like to trade stocks, bonds and currencies. Even core positions in these I trade around or hedge from time to time.

The idea of being a bit more balanced is an idea that appeals to me. I think it might be good for nations and central bankers. If there was not so much debt in the world we could probably all get by with a bit less growth (and that might even be better for the planet). If we had no debt it wouldn't be the end of the world if there was no growth for a while, or heaven forbid even a recession. We'd find a way to get through it, like our parents and grandparents did, and the sun would eventually shine again and a better day would dawn. Instead we have urgent meetings all over the planet, hosted by the most auspicious Keynesian clowns, who make urgent proclamations affirming the absolute necessity of, and their support for, unending growth and prosperity for ever and ever - at any cost. History does not suggest that such ideas correspond to reality (for instance, if someone habitually spends more than they make it often leads to bankruptcy instead of great wealth). But who knows, maybe its a new day and things really are different (especially for nations as opposed to individuals). But color me sceptical for now.

Excuse the ramble. It's Friday and I just had a beer and I'm ready for another.

As an aside - I prefer Dow 15,000 BUT I think I can live with 5000 (but then again, I hope we don't have to validate that assumption.)

Suppose I own 100 oz of gold. And then suppose the Fed prints up a bunch of fiat so that the price of gold goes up by 10X. I still only own 100 oz of gold. So how am I any better off? Actually, if I ever need to trade that gold for something, I have to pay taxes on the phoney "profits" that I made from merely trying to preserve my purchasing power.

Also, as more and more people become aware of what the Fed is doing, gold starts to approach its true value and becomes less and less of a bargain. I really liked the 90's when everyone thought that goldbugs were crazy and no one wanted to own boring gold.

Well, I disagree to a small extent. The gold I own through PHYS has gone up roughly 20% in the last 2 months, while the price of food, seeds, tools and rent has stayed about the same. So if the price of gold (minus taxes on profits) goes up faster than the price of things you want to buy with gold, then the gold going up matters. I have used a small portion of profits to buy multiple years worth of dried food.
In the end, I don't care about how much gold I have. I care only about what it does for my survival, enjoyment, etc.
Of course, if food starts going up as fast as gold, then you're absolutely right.

RT is right, in the sense that deflation is here we are going, and gold will decline in value as with all other assets. That does not mean that, relatively speaking, it will not serve as a constant in terms of value, it's just that all the other assets or currencies against which gold is measured will decline. Reflation has not succeeded and it cannot overcome the overwhelming forces of deflation caused by debt destruction.

This is my favorite part...
“We met at a time of new challenges to global economic recovery, with significant challenges to growth, fiscal deficits and sovereign debt, stemming from past accumulated imbalances."

"Challenges" is like saying Chernobyl meltdown was a bit difficult in particular at the outset.

How about a release that starts "We are fucked but we see a chance to enjoy the whole thing if you ignore the 'lack' of appropriate lubrication...which we are happy to provide-at a price"

All you guys dont know by now the alchymists of many many years ago for example Nicholas Flamel , written in the pages of Lenglet du Fresnoy, Roger Bacon, and Joseph Francis Borri knew the secrets of the philosophers stone. Many monarchs sought this knowledge. Anyhow this well kept secret to turn base metal into precious metals is hidden from the public. Sorry guys. gold drooling serfs.

G-20. BINGO. The Great Intervention is near. Be ready for rebalancing, debt restructuring/forgiveness, and resource confiscation. It will be swift and immense. This action will be so large that the concomitant derivative implosion will be quite muffled to all those who are not directly taken out.

If they really feel "liquidity" is warranted and is in the best interest of the citizens of the world, then why the fukk will they wait for the most opportune moment to execute it as to extract the most OPM from the most suckers?

Sustainable is to growth as dry is to waterfall and one handed is to clap. Translaton - OXYMORON. OUR LEADERS ARE COMPLETE MORONS THAT FAILED GRADE 10 SCIENCE AND DON'T UNDERSTAND THE MOST BASIC LAWS OF PHYSICS THAT WERE BLATANTLY OBVIOUS WHEN ALCHEMISTS REALIZED YOU CAN'T MAKE GOLD FROM LEAD --THE LAW OF CONSERVATION OF MATTER AND ENERGY. MORONS!!!!

The set up is almost identical. Printing without the intended consequences, short term lift to asset prices only to be met by greater and more ferocious falls in asset prices. I know many on here think there's going to be that "ah-ha" moment. Somthing of a total collapse of our economy. I'm of the mind set that we'll just keep grinding. No "ah-ha's"...just a slow dry hump to much, much lower asset prices across the board.

Most of you dolt(z) won't recognize the collapse until Tyler tells you it happend (think Lehman). What will the collapse look like? A slow roll'in bulldozer - think present. The patient has been on morphine drip for the last 4 years (maybe we died when we thought we won the cold war and hit cruise control) so it is likely that the punctuated equilibrium that we had coming to us will not come to pass...a slow (painful) swirl to the bottom is my bet. In four years when you fill-up your Accord for > $25.00 you will know we are close......regression is a beautiful bitch. My southern girl.

In a month I'll have my Nissan Leaf EV powered by 2013 by solar panels on the roof of the house in summer, and by a sterling engine on the wood stove in winter. $25 gas? Bring it on, it'll only make my EV worth even more.

10 Steps - My View on How The Global Financial Crisis will Progress from Here:
1. October 2011- One of the PIIGS countries needs another bailout but it falls apart due to political backlash and bailout fatigue. Markets fall off a cliff, including a fall of 25% in one day. The US dollar soars (due to deflationary demand for cash), US treasuries initially soar but lose momentum very quickly.
2. November-December 2011- markets continue sliding and a sovereign debt crisis rages, resulting in huge falls in PIIGS bonds. US treasuries begin to follow. Sarah Palin announces her run for Republican nomination. The Eurozone begins to break apart, with some PIIGS countries leaving the currency union.
3. January 2012- Due to general debt market turmoil, several large corporate companies with large debt burdens cannot rollover their debt, resulting in the largest bankruptcies in corporate history. Unemployment in America soars above 10%. Sarah Palin wins the Republican nomination.
4. June 2012- Due to plunging US debt markets and nervousness about a US default, the US pulls out all troops from Afghanistan. Many overseas bases are being closed. California defaults, leading to defaults in many other states including New York and Illinois. The UK defaults. The British Pound is destroyed on currency markets, hitting parity with the US dollar.
5. November 2012- With unemployment at 20%, Barack Obama gets easily beaten by Sarah Palin. American outward immigration spikes to an all time high.
6. December 2012- The US Treasury markets collapse leads to the US defaulting on its debt. The Dow falls to 1000.
7. January 2013- The US military begins to revolt due to the troops not being paid.
The equities markets find a bottom around 1000 on the Dow. A minor rally begins based on the hope that Sarah Palin can turn things around. She fails in spectacular fashion.
8. June 2013- Texas, Hawaii, Alaska and Vermont begin secession movements from a federal government in disarray. They eventually succeed. The Capitol building is overrun by ex military personnel, leading to the shutting down of a totally dysfunctional Congress.
9. Late 2013- The secession movement continues, with the result being the complete dissolution of the United States, resulting in various state factions and new political alliances amongst states based on geographical and ethnic similarities. Unemployment is at a staggering 50% (unofficial- as there is no federal government left to collect statistics). Crime is rampant, especially in cities. A mass de-urbanisation movement is underway. Many suburbs are overrun with gangs and are completely deserted due to residents' fears for their lives. Many people begin living in intentional communities across America, living completely self sufficent lives. Many commentators describe the situation as civil war, but in reality it is just complete lawlessness. America's law enforcement begins to be undertaken by local sheriffs rather than state or federal police, as these agencies have collapsed due to lack of funding.
10. June 2016- equity markets bottom around 400 on the Dow. A historical buying opportunity is apparent as relative calm begins to descend upon the world once again, with a completely different world order underway. China is the new superpower. The US dollar has been replaced by a freely floating Chinese Yuan as the new global reserve currency.

But the United States of America reorganizes as the United Green Zones of America. Just like the Israeli settlements: gated communities; compulsatory military service untill 55; women in more combat roles; and the right of 'shoot to kill' outside the zone. On the down side, the food isn't much better than Tel Aviv hotel food.

Seeing this escalating barage of news about sovereign debt crises coming in rapid succession now, along with continual promises of more currency printing to keep these sovereign debt ponzi schemes going, is anyone still foolish enough to think currencies won't be printed to oblivion?

Currency printing is the ONLY way they can keep the worldwide sovereign debt ponzi going now. America or Greece, it makes no difference. America can keep the debt ponzi going longer than Greece. That's the only difference.

Both will collapse eventually, or their respective currencies will be printed to worthlessness trying to keep them going. It's one or the other. There is no 3rd choice.

The following are 20 quotes from European leaders that prove that they know that the financial system in Europe is doomed....

#1Polish finance minister Jacek Rostowski: "European elites, including German elites, must decide if they want the euro to survive - even at a high price - or not. If not, we should prepare for a controlled dismantling of the currency zone."

#4German President Christian Wulff: "I regard the huge buy-up of bonds of individual states by the ECB as legally and politically questionable. Article 123 of the Treaty on the EU’s workings prohibits the ECB from directly purchasing debt instruments, in order to safeguard the central bank’s independence"

#5Deutsche Bank CEO Josef Ackerman: "It is an open secret that numerous European banks would not survive having to revalue sovereign debt held on the banking book at market levels."

#11Bank of England Governor Mervyn King: "Dealing with a banking crisis was difficult enough, but at least there were public-sector balance sheets on to which the problems could be moved. Once you move into sovereign debt, there is no answer; there's no backstop."

#12George Soros: "We are on the verge of an economic collapse which starts, let's say, in Greece. The financial system remains extremely vulnerable."

#13German Chancellor Angela Merkel: "The current crisis facing the euro is the biggest test Europe has faced for decades, even since the Treaty of Rome was signed in 1957."

#16EU President Herman Van Rompuy: "We’re in a survival crisis. We all have to work together in order to survive with the euro zone, because if we don’t survive with the euro zone we will not survive with the European Union."

#20German Chancellor Angela Merkel: "The euro is in danger ... If we don't deal with this danger, then the consequences for us in Europe are incalculable."

Most of the individuals quoted above desperately want to save the euro. They are not going to go down without a fight. The overwhelming consensus among the political and financial elite in Europe is that increased European integration in Europe is the answer

My friend, doesn't everyone have different beliefs? Some of us share beliefs and are backed by billions of co-religionists and some of us go it alone like Siddhartha.

You have chosen the Bible as the history book of God. That's a good choice. I have read quite a bit of it and find parts of it to be exactly right, I find other parts of it to say: "Don't take me literally all the time". And that's what I do.

The earth is only a couple of months old with a population of 2 and the serpent appears in Eden. 2 peeps, 2 months old and evil incarnate shows up. And God doesn't or can't stop it That's where the Bible looses me..

The serpent was created on the 6th day and by the 16 or the 26th day he is the reptilization of Dick Cheney. Genesis 3:1 the serpent was just another creature which God created, except he was more subtil. I guess God had not yet created the head trader of a large Wall Street Investment Bank.

If you want to drag "Paradise Lost" into this to get some preBiblical background into the History of God, go right ahead. It was written in 1667., In my belief system, there is nothing that operates independent of God's will.

I like you DZ, but let me have my understanding of creation and you have yours.

I got spiked twice in the yen over 10 days.. That 77.4-835 area is the new area for exporters. I just started trading some more NOK ( norway/usd over the last couple of months... That Brent /WTI contango got me going. Minus interest rates and transaction taxes ( hypothetically) scared me out of western /south Europe.

I like the gbp though! BoE soverign, and taking the acid pills early! Just get rid of Merve the Swerve! ( Mervyn King : BoE head)